Bloomberg Crude Oil Rises Above $56 on Supply Gain, Jobs Report

May 6 (Bloomberg) -- Crude oil rose above $56 a barrel for the first time since November after a smaller-than-expected increase in U.S. stockpiles and employers cut fewer jobs than economists estimated.

Crude supplies rose 605,000 barrels to 375.3 million last week, the highest since 1990, the Energy Department said today. A 2.5 million-barrel gain was forecast by analysts surveyed by Bloomberg News. ADP Employer Services said U.S. companies eliminated 491,000 positions last month, less than the 645,000 estimated in a Bloomberg News survey of economists.

“The speculators are piling into oil on signs that the economy is recovering,” said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. “Inventories rose only 600,000 barrels when everyone was expecting a gain of 2.5 million, gasoline supplies dropped and employers cut fewer jobs than expected.”

Crude oil for June delivery climbed $2.50, or 4.6 percent, to $56.34 a barrel at 2:47 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 14. Futures are up 26 percent this year.

“Oil is up on indications of an economic recovery,” said Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York. “Prices are trending upward on speculation this will translate into stronger demand.” more...